The London Plan revised early minor alterations - update

The London Plan is the Mayor’s planning document for development in Greater London, and was published in July 2011. The plan has been amended following government changes, with the revised changes nearly complete, a key component of these being the Planning Inspector’s report. This briefing updates members on the revisions and on the views of the Planning Inspector and the Secretary of State for Communities on the role of the Affordable Rent product within the planning system.

Background

The London Plan is the spatial development plan for the 32 boroughs and the City of London, and is the only remaining regional plan in England. It is published approximately every four years, and the latest iteration was published in summer 2011.

The local plans of the boroughs need to be in conformity with the London Plan. In turn, the London Plan needs to be in conformity with national planning policy, in the form of the National Planning Policy Framework (NPPF). The final version of this was published in March 2012, and so post-dated the London Plan’s publication.

In addition, in 2011 the government introduced a new form of housing, the ‘Affordable Rent’ product. This type of housing was to be aimed at those eligible for ‘traditional’ council or housing association housing but, in London, would require rents of between 65 per cent and 80 per cent of market rent to be paid (compared to social rents of about 40 per cent of market rents).

The Mayor decided that the London Plan was in general conformity with the NPPF, despite having been published before it. However, to ensure conformity and to consistency with the newly defined form of social housing, the Affordable Rent product, he has proposed some ‘revised early minor alterations’ (REMA) to the London Plan.

Overview

The Mayor published the proposed REMA for public consultation in June 2012. Following this, a hearing was held in front of a Planning Inspector in late 2012, and the GLA has now published his findings on the proposed changes. He has found the REMA broadly sound, but has however made some recommendations for changes in key areas, mainly in relation to the provision of affordable housing.

1. http://www.london.gov.uk/priorities/planning/london-plan/early-minor-alterations Affordable Housing

The issue that was most contentious during the REMA consultation and subsequent ‘examination-in-public’ (EIP) hearing was that of affordable housing, and how the new ‘Affordable Rent’ product would fit in with the twin aims of ensuring that housing was available to Londoners on lower incomes, and how supply of that housing could be maximised. The two ends, it was argued, were mutually contradictory, because the funding mechanism to ensure the funding and building of Affordable Rent homes was dependent on rents that were much higher than traditional ‘social’ rents, despite the housing being aimed at the same group as those who would normally qualify for social rent homes. As such, they would be unaffordable to them and would not in fact meet the housing needs of people who were, supposedly, eligible for that type of housing.

A number of boroughs argued at the EIP that, if Affordable Rent properties were marketed in their areas at 60 per cent -80 per cent of local market rent, this would put them out of reach for many of their poorest residents; so undermining a central aim of the London Plan. The boroughs argued that, as a result, they should be able to define local levels of affordability in reference to local incomes and rents, and the Inspector agreed with this view:

“The Boroughs as local planning authorities should be enabled to meet objectively assessed needs for affordable housing, the eligibility for which has to be established by reference to local prices and income levels.” (Paragraph 23)

The consequence of this would have been that, where planning permission was being sought for a development that included Affordable Rent homes, if the proposed rents did not meet borough-defined levels of affordability, then the development could be refused planning permission. The Inspector recommended that the Mayor’s proposed change removing the right of a borough to do this should be removed.

Following the Inspector’s report, the Secretary of State for Communities and Local Government has written to the Mayor to indicate that he is happy for the REMA to stand unaltered, i.e. without the Inspector’s recommended deletion.

Other issues were also addressed by the REMA. The Inspector supported alterations that covered:

• greater flexibility for boroughs to set ranges for income levels for intermediate housing • flexibility for accepting financial contributions in-lieu of providing on-site affording housing in s106 agreements • a commitment to consider how the Mayor can support self-build • boroughs identifying sites for gypsy and traveller sites in accordance with national policy • the provision of more cycle parking in new developments • other minor changes relating to looking at Londoners’ health inequalities and green spaces.

The Inspector’s report made another key change to the Mayor’s proposed alterations, namely concerning the Community Infrastructure Levy (CIL). The Mayor had proposed wording that would have prescribed the priority that should be attached to borough CIL spending: the Inspector recommended that this also be deleted.

Commentary

London Councils recognises the difficulty in funding new sub-market housing supply in a context of constrained public spending. While the Affordable Rent model will work for those on low incomes in much of the country, and in most of London, given the high (and rising) level of market rents in much of central London, any home that charges even 60 per cent of these will still be unaffordable in practical terms to many, especially those on low incomes. Equally, the Affordable Rent programme, once complete, will have produced tens of thousands of sub-market homes in London at a time of severe housing need, and when new housing supply across all tenures is barely matching half the new demand created every year.

The Mayor was not introducing a new regional policy on affordable housing by seeking to ensure that the Affordable Rent product was accounted for in the London Plan; rather he was seeking to ensure that the London Plan conformed to national housing policy and planning guidance. The dispute over the process of ensuring this conformity arises because national policy could be interpreted to give two different outcomes in London, as it says both that housing needs should be fully and objectively assessed and catered for (NPPF para 47), and that Affordable Rent is for the same households who would otherwise be eligible for social rented housing (NPPF, Annex 2). The higher the rent level, the greater the tension between these two policy aims.

The Inspector’s report supported the view that boroughs were within their rights under the NPPF to set their own thresholds for what constituted ‘affordable’ in their local areas, and thus could refuse planning permission for developments that did not meet this. However, the Secretary of State rejected this view.

While it is not unusual for the Secretary of State to override the recommendations of one of his own Inspectors, what was unusual was that he did not give reasons for doing so. His letter, also published by the GLA with the Inspector’s report, does not directly refer to the basis of the conflicting views, namely differing interpretations of national policy, but rather states that ‘[i]mposing rent controls through local planning policies would hinder the objective of increasing the delivery of affordable housing’. Whilst this is undoubtedly his concern, it is not certain that, as written, this is a sufficient justification to protect his decision from legal challenge. It does also not fully address the concerns raised by boroughs (and addressed by the Inspector) that Affordable Rent homes may not actually be affordable for their intended tenants.

On 14 August the Mayor published the Inspector’s report and submitted the ‘intend to publish’ REMA to the London Assembly for their consideration. Under this new final stage in London Plan preparation or alteration (a change to the GLA Act 1999 introduced by the Localism Act 2011), the Assembly has 21 days within which it can reject the alterations by a two thirds majority if it so wishes. It remains to be seen what the Assembly will do, and, if they agree with the Mayor’s proposed alterations, whether there will be any subsequent response from boroughs.

Author: Dominic Curran, principal project and policy officer (020 7934 9508) Click here to send a comment or query to the author

Links: The London Plan homepage

This member briefing has been circulated to: Portfolio holders and those members who requested policy briefings in the following categories: Economic Development; Housing and Planning